While rising home prices are pulling more troubled homeowners back from the brink of foreclosure and there are numerious foreclosure prevention efforts at the national, state and local levels, the fundamental factor driving the drop in foreclosure is due to better lending guidelines, according to Vice President Daren Blomquist at RealtyTrac. 

Foreclosure sales are on track to account for about 20 percent of all sales in 2012, and I would expect a similar percentage for 2013. Only when that percentage drops below 5 percent can we conclude that the housing market has fully absorbed all the distress created during those dark days of the housing market in the mid-2010s.